Justification of Changes

Justification of Changes

1) P.L. 111-5 section 1201(a) extended IRC section 168(k)(2) to include property placed in service before January 1, 2010. It extends a provision that allows taxpayers the ability to take a special depreciation allowance on the certain qualified property in addition to the depreciation deduction they normally take under the Modified Accelerated Cost Recovery System (MACRS). The impact to the filings of the 2008 Form 4562 would only affect fiscal year taxpayers whose tax years begin in 2008 and end in 2009. Therefore, we anticipate there would be no expected increase or decrease in the number of filers of the 2008 Form 4562 with this change.

2) P.L. 111-5 section 1201(b)(1)(A) extended IRC section 168(k)(4) to include property placed in service before January 1, 2010, for eligible qualified property (January 1, 2011, for certain aircraft and property with a long production period). This extension affects Forms 3800 and 8827 in making the election to accelerate research and minimum tax credits in lieu of special depreciation allowance during fiscal year 2008, not Form 4562. No expected increase or decrease in the filing of the 2008 Form 4562 with this change.

3) P.L. 111-5 section 1201(b)(1)(B) added new IRC section 168(k)(4)(H) which added special rules for extension property. As with item (2) above, the affects are seen on Forms 3800 and 8827 and not Form 4562. No expected increase or decrease in the filing of the 2008 Form 4562 with this change.

4) We added references to Revenue Procedures 2008-65 and 2009-16 to provide additional guidance in making the above mentioned election to accelerate certain credits in lieu of taking a special depreciation allowance. No expected increase or decrease in the filing of the 2008 Form 4562 with this change.

5) We updated the IRC section 280F limitation amounts for passenger automobiles and trucks and vans placed in service in 2009. The instructions usually advise taxpayers to research these limits themselves in the Internal Revenue Bulletins until the 2009 Instructions for Form 4562 are released in the latter part of 2009. This information would only affect fiscal year taxpayers whose tax years begin in 2008 and end in 2009. No expected increase or decrease in the filing of the 2008 Form 4562 with this change.